Addictive Founder Simon Andrews on the Future of Agencies

Simon Andrews, Founder of Addictive, joins Cross Screen Media CEO Michael Beach to share his thoughts on what the agency of the future looks like and how marketers can benefit from the intersection of mobile and commerce. Watch our latest Screen Wars Thought Leader Interview here and read the full transcript below!

Michael Beach: All right, Simon. Thanks for joining us today.

Simon Andrews: Pleasure to be here, Michael.

MB: Excellent. Where do we find you today?

SA: I’m in sunny Hackney in East London.

MB: Excellent. Did everyone calm down from the soccer super league uproar?

SA: Yeah. We found out today that it seems there will be twenty million pounds compensation to Grassroots Football, which is good. We’re not giving up the Euro starts this weekend, so we’ve now got the national team to worry about, which we tend not to do that well. But it will be fun.

MB: Well, we’ll start you off with an icebreaker that we ask all our guests. What was your first job and what learnings did you take away from it that you applied to your career?

SA: My first job was actually a lemonade salesman. In the UK, this is a long time ago. This company had trucks and we’d drive to people’s houses and sell them lemonade and pop and different things from there. I got this job as a starter job, which then grew into a Sunday job as well.

It was really interesting because I got the job, and I got paid a basic wage, which wasn’t very much. But, I also got commission. And why, really? You’re seeing the same people every week, you’re talking and they’re buying the same product every week, but you’re selling. I learned that getting along with people is important—listening to and taking signs and selling. It’s one of the things I think sometimes we miss. If people don’t work on the selling side now, I think they don’t understand how important selling is. I learned getting people to buy a bit more from you is a very good skill at a very young age.

MB: An entrepreneur from the start.

SA: Well, working for somebody else, but getting paid commission is actually quite enriching. The road to Christmas, I did really well that year.

MB: Oh, I love it. How’d you get your start in the media space?

SA: Well, I just decided. I don’t really understand quite what happened. I decided I wanted to work in advertising. I was living in Leeds, which is a medium-sized city in the UK. All of the advertising industry is in London. There’s not much else from there. But I wanted to work in advertising. So I started reading all the job ads and applied to everything to do with advertising. I got an interview with a media planner, and the guy is telling me it takes about six or eight weeks to learn it and then I’d be an expert. I never heard from them ever again.

Two weeks later, someone advertised for a media executive and I went and told them what I’d learned at the first one and got the job. So I was working in media and advertising. I hadn’t understood the different disciplines or different types of jobs, but I enjoyed it very much. Then what happens in the UK, I think it’s a bit like the States, at some point you have to go to the big city to learn how to do it properly. So after about two years in Leeds learning the trade, I moved to London and have worked in media on and off ever since.

MB: Well, that’s great. Would you mind giving our audience a little bit of background on Addictive and what projects you’re focused on?

SA: We started Addictive just over ten years ago as a mobile agency. I left WPP really excited about mobile. I was convinced that we were going to see the same trajectory we’ve seen with the web, and I’d been involved in that ten years earlier.

So I started Addictive. We partnered with a very cool company in South Paolo, who are great engineers and help build apps for us. But over time, I realized that there’s not a huge amount of money to be made in building apps for people. The more interesting thing was the strategy. So we morphed into more of a strategy firm.

We still do strategy and consulting. We’ve started this media area, which is really the way we’ve been trying to educate people about how things are changing. The pace of change continues. There are so many things going on. So we started a newsletter ten years ago to update people about that, and we still do the newsletter. We do events and we’ve got community around there.

With the consultancy, there tend to be two areas we’re very interested right now. One is merchant media. Amazon’s a prime example, but you tie media spend to the places where I think people are buying things. So rather than advertising on Yahoo or on Facebook, you’re advertising on Amazon or Instacart. Variants from that space.

The other thing that’s a passion is trying to improve creativity in advertising, because in digital, we know all the fabric works really well, all the plumbing works really well. But the ads are generally terrible. We also know that if you improve the ads, it makes the plumbing work much better. So the best way of unlocking your media budget now is better creative. So that’s a big passion for us, and we’re trying to do more projects around there.

MB: Excellent. I want to definitely dig into the intersection of mobile and commerce more in a little bit, but I’m interested in your background. You’ve had twenty-plus years in launching five agencies. What do you think agencies should be focusing on in 2021?

SA: I’m a fan of agencies. If you go back to Mad Men—the idea of a bunch of really smart people that are going to sit and listen to your problem and solve it for you—it’s a fantastic model. But what’s happened is the madmen, all the rest of them, have turned to a greater or lesser extent into factories. Whatever your problem, they’re going to tell you the answer is what they produce in their factory. TV commercials, a web plan, SEO plan, Facebook ads. Advertising agencies need to be about understanding what’s changing. People don’t change, but the tools that we say live the life change.

It’s important to understand how things are changing and how you can apply advertising to work across those areas and avoid that being a factory. Because once you’re a factory, you can make a lot of money but you’re slowly dying because the market for TV spots, websites, and SEO is diminishing as more people get serviced with those. It’s better to try and understand what the new opportunities are where you could apply those great advertising skills and get people to do what you want.

MB: Well, on that note, as you look forward, say five or ten years from now, what do agencies look like?

SA: I think they go back to being smaller again. I think the in-housing thing is interesting, but I think the idea is you don’t need an awful lot of people to do this. We have this model, architects, and artisans. Architects know how to build things. If you’re some world-class architect, you understand how some can now build very tall buildings or very different buildings. You understand the principles of the craft that’s involved from there. But you’re partnered with the people who do that craft.

We’re architects. We know how to do some stuff. We can buy Facebook ads, we can build a website, whatever. But we’d rather partner with people who are experts at that—the artisans who are really good at their craft and find that balance between those two things. We’ll help with the architecture, we’ll help you find the right artisans to do that.

I think in the future, you’ll see agencies more in that architect space and go to a production company or a media company and have them execute the craft skills.

MB: So is that similar to a bigger version of a consultancy? Or is there still a gap there that the agency needs to fill?

SA: I think the gap between consultants and agencies isn’t as big as people make out. They’re both very smart people. I think agencies are best at understanding the power of creativity. I think consultants understand the power of logic and data. Obviously, there’s a happy medium between the two, but if you’re trying to work out how you identify some, the DNA of an agency is about creativity. The DNA of a consultant is about that data and understanding. So there’s a little bit of a gap between them still.

MB: Excellent. Well, I want to go back to the intersection of mobile and commerce. You’ve written a lot lately about TikTok, and you appear to be bullish on the value that it provides marketers today. I guess I have a two-part question there. First, do you think the market fully understands the value of a platform like TikTok enough as they launch an ad offering? Will the marketer look at that more like Facebook or Twitter and Snap? Second, do you think their algorithmic feed will help the user experience as their amount of content explodes as marketers fully adopt the platform?

SA: That’s a great question. I’m fascinated by TikTok and it’s blown up so quickly; it’s so big. It shapes culture in so many ways now but I don’t think many brands or marketers understand it because it’s really hard to get into. When you go to TikTok and just sit there scrolling through things, it’s really hard to, in some ways, understand what it’s about because it’s so varied. That algorithmic knowledge they’ve got, the expertise they’ve got, is really going to serve lots of different things.

But it’s very hard to work out what it is. Then, when you’ve sussed it out, you talk to your friend and they’ve got a completely different take on it because they’re seeing different content. So I think the platform still needs more understanding. People get the scale but don’t really understand the nuances of this and the little corners you find. So “book TikTok” or ”chef TikTok,” et cetera, and how strong those differences are from there.

Converting that to advertising, they followed the Facebook playbook. They hired lots of people who’ve been at Facebook and Snap, et cetera from there. They’re going down that route. The algorithm does make it more difficult because I don’t think we’re going to see a time when there are as many ads in the feed as there are on Facebook because I think that would become overwhelming because of the way you can’t scroll past them quickly.

I think what they do now is quite interesting. People pay quite a pretty price for being the first ad that someone sees from the start of a TikTok session. I think that the scarcity of advertising will continue to be a thing. You’ll pay a lot of money on TikTok to be one of the few ads that get seen by people rather than raising more money to be one of the many ads seen by people.

I think of the idea that an ad is more special because you don’t see too many ads as a way of bouncing that out. Whether they can pull it off, I don’t know, but the algorithm should be able to find the perfect ad for you and the perfect ad for me. I think advertising will pay for that perfection of targeting, if you can call it that.

MB: I love that. We talked so much about the incremental value in targeting, but you probably don’t look at enough of the incremental value of being first in a really scarce environment in digital. That’s traditionally just been used to justify the pricing in television.

SA: Yeah, and I think if you look at the mobile web or the desktop web, sites are so cluttered now with so many ads chasing every possible ad dollar that it has turned the customer experience into a nightmare. I think smart people are going to realize, let’s respect the customer because we’re going to have less ability to target them, we have less data on them. So we need to respect them as strangers, for lack of a better word, but show them the ad we think is most appropriate and then hold off showing them loads of other ones as well. There’s a discipline needed there, which I wonder how many people are able to exercise.

MB: Excellent. Yeah. You coined the term “new TV,” which is fantastic. Do you see commerce-enabled creative in video on the brand marketing truly converging or will they be separate disciplines in the future? Going back to the agency of the future, are agencies built to handle this?

SA: I’m not sure agencies are built to handle this. Yeah, isn’t it a bit of nonsense, this whole idea of long-term and short-term and brand and performance? If I’m spending some marketing money, I’d like to see my sales happen tomorrow. The average CMO stays in the job for fifteen months. So the idea that CMOs spend a lot of money now for brand value twenty years down the line I think is just a sales pitch for people who sell TV commercials.

If you’re saving up for a Mercedes, when you can afford it, it’s too late. But kids don’t grow up loving Mercedes because of ads. They grew up because Janis Joplin sings about them or they see it in a fantastic movie, or they see one parked on the road. Advertising long-term builds up, but you’ve got to have it delivering value in the short term.

I think that while that allows performance marketing to be sometimes a bit brusque, a bit brutal, knowing that something is working is really important. If it’s got a long-term value as well, that’s even better. But I think you need to pull the two things together. Especially as video becomes the first choice for everybody. Why wouldn’t you use video if you can? The idea that some videos brand the long-term and somebody has to perform in the short-term just feels like a false construct to me.

But having said that, your question is very personal because I don’t think many people in agencies think about it like that. They seem to look at one or the other.

MB: Yeah, it definitely seems to be a legacy of how they’re structured. One thing we find is that a lot of times when we get into the team that handles the brand marketing, the agency or brand really has no idea how their CRM data functions or how any of those elements that you’d use in more of a direct marketing element even works. So I’m interested to see how those two worlds convert.

SA: I think that I know in a sense. I want to know as much as possible about this company before I start doing something. I’ve been a bit unfair to television. When looking at the real world, we’re going to buy impressions that reach everybody all the time, and the people that like it will find a way to buy the products.

You don’t need to do that work. That laziness, which it really is, it’s just going to go away. You’re going to target. In the future, I’m not going to run one ad for everybody because I’ll have the tools to actually show it to the audience I want. We worked on a diaper brand and we decided to spend ten million pounds a year in advertising. Ninety percent of that was wasted because the people who were seeing the TV ads didn’t have young children anymore, or no connection with young children. The economics of that don’t make any sense, because if you say, okay, I’ll save you a million dollars and eliminate all your wastage. There’s a huge amount of value for the broadcaster there. The brand’s happy, the people are happy.

So I think we have to re-see how people think about how you can use targeting at that macro level to eliminate wastage. And that throws up lots of value for people.

MB: Absolutely. Well, more of a high-level question. What’s one major thing in the media space that you think is really important that nobody’s talking about?

SA: Creative. The world of media in creative is very separate these days. I think my people respect the importance of each other. They don’t really have the relationships or the language to partner those two things together. Mobile is this amazing tool. It’s everyone’s remote control to life and to do everything on that. But the ads we serve up on Facebook or on display or whatever tend not to be very good.

If you took the average ad that you see on your mobile, and that was on your linear TV ad, it’d be a revolution. People would be burning their TV sets because there’s so many terrible ads. So getting that better balanced and the importance of creative being seen and respected is a big thing.

MB: Excellent. We touched on it earlier, but you put together a fantastic newsletter, Fix. It’s a must-read for our team. You provide a lot of insight on a wide range of topics. I was wondering if you’ll give us a little sneak peek. What do you think the big stories are to watch the rest of the year?

SA: Well, I think that the thing that we’re all focused on is the whole privacy thing. From GDPR, California, cookies coming out of Safari, the whole idea phase now Google is going to implement. We found out this week that you won’t be able to use IP addresses. All the fabric of the things we’ve built the business doing are all melting away.

Does anyone care that Facebook made less money? Probably not. But advertising fuels our economy. If you’re Ford, you can only employ thousands of people to make cars if people want to buy the car, so you have to do that. If you’re NBC, you can only afford to have all the people who can do those shows. Advertising pays for all that.

SA: But if you’re a person trying to work out, well, what do I want to watch, et cetera? What do I want to buy? Go on holiday, buy my new car, et cetera? Ads work really well. When we play around with a family and make it harder to do that, we hurt lots of people. I think that the idea that one company, Apple, is able to exact this impact on some of the other companies because their business model doesn’t require them to worry about advertising just seems a little bit unfair and unusual. One wonders if regulators at some point start to look at that as an issue.

So that’s something we know about. I think there’s a long way to go before we get some resolution of what happens next and how we cope with this, and what the ramifications are for everybody.

MB: Excellent. We’ll get you out of here on one more question that we ask all our guests. If you could have everyone on your team read one book right now, what book would it be and why?

SA: I’m going to go back to one of my favorites. I got a job at Dima Marketing Agency about twenty-five years ago and I’d always worked for on-brand advertising agencies. I was being very sniffy about direct marketing. But I took this job. It looked interesting. It had interesting clients. I asked for a reading list and they gave us this pile of books from David Ogilvy and Lester Wunderman and Stan Wrap. I was blown away by them. But the one that I really rate, Claude Hopkins, My Life in Advertising. So here’s a guy in the 1920s, 1930s, who was moving around the Midwest of the United States, just helping people sell stuff while having great ideas. Very quickly, my favorite example: he got charged with building the sales of Cotosuet, which is a meat derivative product used for cooking. I think it was in Chicago.

He found out that the local department store, Rothchild’s, had a spare floor they hadn’t used yet. So he went there, persuaded them to build the world’s biggest cake, bake the world’s biggest cake, using this Cotosuet from there. Then he ran out to the local newspaper and told them, “Come and see the world’s biggest cake.” If you bought some suet, you got a chance to guess the weight of the cake and you could win something fantastic from there.

So here was a campaign that used lots of different tools, that now would be TikTok and experiential web, but he just used whatever gradient was available to actually execute a great idea. I love the simplicity of that. You have a good idea, what could we do? Who do we involve to make that a fantastic event for people who will drive some sales as well? So, Claude Hopkins, highly recommended.

MB: That’s a great recommendation. Well, Simon, I’ve enjoyed our conversation and I know that our audience is going to love the talk. I appreciate your time.

SA: I appreciate the invitation, Michael. It’s really interesting to chat with you. Your interesting questions got me thinking, and I look forward to seeing, with all the work you do, how these things flow out in the coming months.

 

 

Cross Screen Media is a marketing analytics and software company empowering marketers to plan, activate, and measure Connected TV and audience-driven Linear TV advertising at the local level. Our closed-loop solutions help brands, agencies, and networks succeed in the Convergent TV space. For more information, visit CrossScreenMedia.com.